New rules for those chasing bad debts

legal_updates

If you are chasing a debt from 1 October 2017, you need to be aware of and follow the new rules.

Author: Nona Bowkis
Published:
Reading time: 2 minutes

This article is 4 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

For many types of court cases, there are certain actions which have to take place before a claim can be issued. These actions are set out in the pre action protocols which can be found in the Civil Procedure Rules (CPR).

From 1 October 2017, a new pre action protocol will be introduced for those chasing debt payments.

Currently, creditors will generally give a debtor 14 days notice to pay up or face court proceedings. However, under the new protocol the debtor must be given 30 days to respond and also be given specific information and documents. If a creditor fails to provide the 30 days’ notice or fails to provide any of the essential information, there are likely to be cost penalties if the matter gets to court.  In short, if you are chasing a debt from 1 October 2017, you need to be aware of and follow the new rules (of course Lawgistics can prepare the correct letters on behalf of our members to ensure the protocol is followed in full).

The new rules will apply to any business chasing an individual for a debt and from 1 October 2017, the term individual will also include sole traders and so those dealers who operate on a sole trader basis, will need to be given 30 days notice to repay any debt before court action can be started.  The protocol will not apply to any debt being chased from a company and so if a company (or partnership) owes you money, its business as usual.  

Nona Bowkis

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.